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The Navy Department's top official said he supports a fallen Marine receiving the nation's highest combat valor award for his heroics in Iraq eight years ago.

Navy Secretary Ray Mabus said Monday the decision rests with Defense Secretary Leon Panetta, boosting anticipation Panetta will overturn an earlier, controversial decision to award Sgt. Rafael Peralta the lesser — though still prestigious — Navy Cross. The Navy Department acknowledged earlier this year that it was reviewing new evidence in the case that proponents of Peralta say should result in his award being upgraded.

Peralta, 25, is credited with saving the lives of several Marines by smothering a grenade and absorbing the full brunt of its blast during house-to-house fighting in Fallujah, Iraq, on Nov. 15, 2004. He is considered one of the most famous Marine heroes of the Iraq war.

Mabus made the remark during an unrelated Navy Cross ceremony for Marine Sgt. William Soutra, who received the nation's second-highest valor award at Camp Pendleton, Calif., for heroism in Afghanistan in 2010.

Peralta's case is a complicated one. Four years ago, then-Defense Secretary Robert Gates denied Peralta's nomination for the Medal of Honor, infuriating the Marine's family and Marines across the country. His family refused to accept the Navy Cross.

Gates decided in 2008 that the evidence in Peralta's case was inconclusive, saying it is unclear whether the Marine made a conscious decision to smother the grenade because he already had been mortally wounded in the head by a ricocheting rifle round. In awarding Peralta the Navy Cross, the Navy Department said in his award citation that he had "reached out and pulled the grenade to his body" — a selfless, heroic act typically associated exclusively with the Medal of Honor.

The Navy Department acknowledged in March that it was reviewing a new pathology report and two videos recorded by fellow Marines on the scene after the blast. Rep. Duncan Hunter, R-Calif., a Marine officer who served in Iraq and Afghanistan, has pushed hard for the review.

Panetta's staff is still reviewing Hunter's request, said Eileen Lainez, a Pentagon spokesman, on Tuesday. She declined additional comment.

Hunter told Marine Corps Times on Monday that Mabus' recommendation is encouraging. But for Peralta's award to be upgraded, it will need to be approved by Panetta and President Obama.

"This is all great news," Hunter said. "I don't think Secretary Mabus would say something like this unless he and Secretary Panetta were on the same page. It bodes well for the right thing being done for Peralta and his family for Secretary Mabus to come out like that publicly and endorse the Medal of Honor."

George Sabga, a spokesman for Peralta's family, was pleased to hear of Mabus' decision but said the family doesn't want to get ahead of anything.

"It has been a long eight years, and we try to take it one step at a time," Sabga said.

The new video may have proven to be the tipping point for Peralta's nomination, Sabga said. It shows that Peralta took the brunt of the explosion to his chest, reinforcing the notion he deliberately shielded his fellow Marines from the blast, he said.

"If you look at that video, you can tell there was no damage to his leg," he said. "It was all under his chest."

Peralta's younger brother, Ricardo, currently serves as a Marine infantryman. He told Marine Corps Times in 2010 that he enlisted to carry out a promise made to Rafael at his funeral.

"Justice will be made," he said then about his brother's valor case. "My brother will get that Medal of Honor. He deserves it."